There is no net zero carbon without a circular economy

There is no doubt the real estate industry is changing. The flurry of recent net zero carbon commitments inspires optimism and shows the narrative is moving in the right direction. The real estate sector seems to know what to do –but does it know how?

Addressing embodied carbon

Currently, almost all immediate action is centred around decarbonising building operations. Embodied carbon has also made it onto the agenda – which is good news given that historically it has been largely ignored – but the sector has not yet figured out how to go about its reduction. We need to find the solutions fast – currently, embodied carbon associated with built assets is responsible for around 11% of all global emissions. In addition, to accommodate for population growth, the world’s building stock is expected to double in size, meaning that embodied carbon will account for an increasingly large proportion of the global carbon footprint, as operational carbon continues to be reduced. It is a hugely complex challenge, but if the real estate sector is serious about achieving net zero carbon emissions, it has to address it in a meaningful way, not just acknowledge it. And the only way to achieve embodied carbon reductions at the pace and scale required is for the real estate industry to transition to a circular economy.

Trustful collaboration is the true catalyst of the circular economy – and this is precisely why this transition is so complex

Marit van Rheenen, Circular Economy Expert, Upstream Sustainability Services, JLL
Closing the resources loop

The reduction in embodied carbon and the circular economy are based on the same principles: to cut down waste, pollution and demand for raw materials by keeping resources in the value chain for as long as possible. Avoiding new construction is the most preferable option as it eliminates the need for virgin materials completely. This means working out how the existing stock can deliver the new function that is required, or prioritising the reuse of existing components, such as steel frames, concrete blocks or bricks. Design which optimises material use and delivers durable, adaptable buildings which can change functions daily and over time is the next step – it ensures that any new materials are used to their maximum potential and for as long as possible.

Similarly, the construction methods chosen should focus on efficiency too: minimising offcuts and overordering, or manufacturing components off site are just a few examples. Finally, all new materials, besides being durable and easy to maintain, should be low or zero carbon and reusable, or at the very least recyclable. Circular economy summarised in a few principles might sound rather simple, so why does the real estate sector find it so difficult?

Taking a lifecycle thinking approach

Transitioning to a circular economy, and the embodied carbon reductions associated with it, needs the real estate industry to embrace lifecycle thinking. This is where the key challenges come from: shifting from the current silo-oriented system to a lifecycle approach can only happen with forethought, long-term planning and, most importantly, the entire value chain collaborating towards the same goal. In other words, the producers, distributors and consumers along an asset’s lifecycle have to find profitable ways to be resource efficient, sharing the benefits – as well as costs – of closing the loops. This in turn raises the question of responsibility: all stakeholders need to agree on who will be accountable for the positive, and potentially negative, impacts of resource use. If not conducted carefully, there is a risk that the debate on how to work together will be overshadowed by attempts to claim credit and shift blame.

Trustful collaboration is the true catalyst of the circular economy – and this is precisely why this transition is so complex. Building and maintaining meaningful, durable relationships is one of the hardest challenges for any business. But it is also a huge opportunity – reducing embodied carbon and creating the built environment in line with circular principles brings long-term value and offers resilience. It’s not only what is right for the planet; it’s also what is right for securing the prosperity of businesses.

This shift will have to happen. Circular economy addresses the issue of embodied carbon and is essential to tackling the climate crisis. The math is simple: now, economic growth depends directly on our resource use, but the planet’s resources are limited. To keep growing, we will need to decouple growth from the consumption of virgin materials. And we will need to do it collectively – a circular economy means everybody taking part, as no organisation can achieve circularity on their own.

This article was published as part of “Transforming real estate: our views”, a digital magazine where our sustainability experts shed a light on how to navigate the current transformational path, giving you the tools and knowledge to ensure your business is future ready.

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